A junior member of the Deutsche Bank foreign exchange sales team nearly cost the Bank billions at a time when it is already under intense scrutiny from regulators. He accidentally sent a hedge fund client $6 billion while their boss was on holiday.
[Image 1: A junior member of the Deutsche Bank foreign exchange sales team was reportedly responsible for Deutsche Bank's mistake ( M. Spencer Green/AP)]
[Image Courtesy: http://static.standard.co.uk/s3fs-public/styles/story_large/public/thumbnails/image/2015/10/20/10/Trader-headinhands.jpg]
The client supposedly received a $6 billion payment due to a slip-up from the bank's foreign exchange desk in June. However, the money was recovered the same day. Nevertheless, the incident was reported to the U.S. Federal Reserve, the European Central Bank and the UK Financial Conduct Authority reported the Financial Times.
The details emerged yesterday just hours after the German investment bank said that it would ditch several of its top managers as part of a shake-up of the struggling business under its new British chief executive.
It was believed that the junior trader had erroneously processed a gross amount, instead of a net value. In other words, the trade had “too many zeroes,” one of the members of the staff told the newspaper. Although it was only a virtual transaction, it was enough to cause a scare.
Neither the employee’s name has been announced, nor was the Deutsche Bank available for comment.
Two co-chief executives of the bank, Juergen Fitschen and Anshu Jain had resigned in June following alleged slip-ups and missed profit targets. They were replaced by the new co-CEO John Cryan.
Cryan had sent a memo in July to employees citing “antiquated and inadequate technology” and too much reliance on “manual labor” as core problems, which have hurt the bank’s efficiency.
Bank Errors in the range of $50,000 to $100,000 occur at times, and a big erroneous trade can influence the market. It is unclear whether Deutsche Bank’s June error had any effect on currency prices, reported The Wall Street Journal
[Image 1: A junior member of the Deutsche Bank foreign exchange sales team was reportedly responsible for Deutsche Bank's mistake ( M. Spencer Green/AP)]
[Image Courtesy: http://static.standard.co.uk/s3fs-public/styles/story_large/public/thumbnails/image/2015/10/20/10/Trader-headinhands.jpg]
The client supposedly received a $6 billion payment due to a slip-up from the bank's foreign exchange desk in June. However, the money was recovered the same day. Nevertheless, the incident was reported to the U.S. Federal Reserve, the European Central Bank and the UK Financial Conduct Authority reported the Financial Times.
The details emerged yesterday just hours after the German investment bank said that it would ditch several of its top managers as part of a shake-up of the struggling business under its new British chief executive.
It was believed that the junior trader had erroneously processed a gross amount, instead of a net value. In other words, the trade had “too many zeroes,” one of the members of the staff told the newspaper. Although it was only a virtual transaction, it was enough to cause a scare.
Neither the employee’s name has been announced, nor was the Deutsche Bank available for comment.
Two co-chief executives of the bank, Juergen Fitschen and Anshu Jain had resigned in June following alleged slip-ups and missed profit targets. They were replaced by the new co-CEO John Cryan.
The new co-CEO John Cryan is splitting its investment bank into two separate unit’s structure after €6bn third quarter loss. Cryan plans to shed assets and shrink the bank and has launched a major business and management shake-up, as part of a strategic overhaul
Cryan had sent a memo in July to employees citing “antiquated and inadequate technology” and too much reliance on “manual labor” as core problems, which have hurt the bank’s efficiency.
Bank Errors in the range of $50,000 to $100,000 occur at times, and a big erroneous trade can influence the market. It is unclear whether Deutsche Bank’s June error had any effect on currency prices, reported The Wall Street Journal
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